Silicon Playgrounds

A vision of the future in Tallinn.

Who are you and where do you live? ‘I’m Joe Bloggs,’ you might say, and ‘I live in Bishop’s Stortford; not that it’s any of your business, whoever you are.’

Except you’re not, and you don’t, and it is. Since you probably spend more than seven hours a day actively on the internet (and the rest of the time you’re there whether you like it or not), you have multiple online identities (Google, Meta, Apple) with data that lives anywhere from Ireland to California to China. There are countless scraps of e-Joe Bloggs living out there in a vast, unending digital world.

Who we are and where we live is no longer solely defined by our physical self and location. It’s a dystopian thought, but in Estonia they have leaned into this brave new world with a scheme where anyone can become an ‘e-resident’ of the small Baltic republic.

After paying a fee of €100 and passing a background check, you get a little card with a chip that allows you to access Estonia’s online services, provide secure digital signatures and remotely participate in the local economy. In just 15 minutes, you could open an EU-resident company that you can run entirely from your home. Is this a gimmick or a revolution?

The war in Ukraine has highlighted many of Europe’s most dubious residency schemes. ‘Golden Visa’ programmes aimed at Russian oligarchs, most notably in the UK, have been suspended, as was a Portuguese passport scheme for the descendants of expelled Sephardic Jews (Roman Abramovich’s application had been certified by a corrupt rabbi with links to Putin). The violent detention camps guarding ‘Fortress Europe’ in Libya and the UK’s attempts to deport refugees to Rwanda only further highlight the arbitrary hypocrisy behind how we control residency.

On the other side of the continent, just two hours from the Russian border, the Estonian capital, Tallinn, has a history that shows how ephemeral borders can be. For centuries it was a member of the Hanseatic League, the confederation of cities that once dominated Baltic and North Sea trade, and it remains the prettiest and best preserved medieval town east of the old Iron Curtain. In recent centuries it has seen Swedish, Russian and German imperialism come and go.

The idea for e-residency came not so much from this transnational history as from Tallinn’s current incarnation as the birthplace of Skype, Bolt, Wise and other tech startup successes. After the ‘Singing Revolution’ restored independence from Soviet occupation in 1991, Estonia had little state infrastructure, money or resources. So it bet on the emerging internet, building e-government from the ground up and investing in digital infrastructure and skills.

Thirty years later, ‘e-Estonia’ is more than just neat branding. Pretty much the only thing you can’t now do online is get married or divorced, explains President Alar Karis, a molecular geneticist with the air of a national grandfather. The key is the e-identity that every citizen, and e-resident, has on their compulsory ID card (and smartphone), allowing them to securely undertake legal functions – banking, healthcare, voting – while also overseeing how their own data is accessed and used by both public and private services. To combat Russian cyber attacks, everything is backed up in a ‘Data Embassy’ in Luxembourg.

Estonian officials privately consider most other European countries’ digital systems ‘Stone Age’, but the key, argues former Chief Information Officer Taavi Kotka, was not clever engineering but political will and public buy-in. Kotka, an engaging big-picture thinker, is widely seen as the father of e-residency. In the post-Soviet decades, investors and immigrants weren’t exactly queueing up to move to a small remote country with long winters, a weird language and an aggressive imperialist neighbour. So Kotka and his team thought that by selling access to e-Estonia’s homegrown digital tools, they could remotely attach people to the Estonian economy and make the country as renowned for e-services as Switzerland is for banking.

To get attention, Kotka set a goal of 10 million e-residents by 2025 (‘Why not a billion?’, Silicon Valley investor and e-­resident Tim Draper asked him). They are nowhere near that, but nearly 100,000 e-residents have founded over 20,000 companies. It does not make Estonia a tax haven (you still owe tax where you live or create value) but it still brings in a handy return on a small budget. Defining its ‘success’ depends on what its purpose is.

People (overwhelmingly men, reflecting the tech sector’s gender gap) from more than 175 countries have successfully applied, for all sorts of reasons. British-Taiwanese entrepreneur Tim Lai, who imports bubble tea ingredients, was attracted to how he could run his global business from anywhere; he finds the possibilities ‘fascinating’. Brazilian blockchain entrepreneur Edilson Osorio faced threats from corrupt vested interest, so he moved his business somewhere less bureaucratic and more secure.

After Russians (for whom applications and visas for Estonia are now suspended), Ukrainians are the biggest source of e-­residents. Alexander and Natalia Storozhuk couldn’t make use of PayPal, Wise or European banking from Kyiv, but within a few hours they were set up remote­ly in Estonia; compared to the bu­reau­cracy in Ukraine, they say, ‘it was unbelievable’.

Attracted by Tallinn’s startup community and networks, Osorio and the Storozhuks have followed their digital selves by becoming physical residents, but e-residency explicitly does not include the right to live in Estonia. And while the tech sector eagerly wants foreign talent (there are startup and investor visas), Estonia has a complicated relationship with immigration, which is limited both by location and an annual quota.

The Soviets deported tens of thousands of Estonians to Siberia while also managing the immigration of tens of thousands of Russian labourers; by 1989, a third of the country’s population were ethnic Russians. Scarred by imperialism (and the persistent threat of Russian meddling), independent Estonia insisted that Russian speakers pass Estonian language and civics exams to formalise their new citizenship; thousands were left stateless for years.

Social inequality between the two groups persists and, despite its economic development, Estonia remains a strikingly white society. While Estonians are strongly supportive of EU freedom of movement and have shown great solidarity with Ukrainian refugees, the European Social Survey has found that than half are against immigration from other races. The far-right EKRE party were partners in a recent government.

It is perhaps unsurprising, then, that e-residency is sold differently at home and abroad. Internationally, it is what the programme’s director Lauri Haav calls ‘the world’s first transnational digital identity’. Domestically it is presented as a way to bring revenue and investment into the country, implicitly without the need for increasing immigration (one wonders if such an idea would appeal to Brexit Britain).

Prime minister Kaja Kallas, dubbed ‘Estonia’s Iron Lady’ by the British press, emphasises the importance of openness, seeing e-residency as part of a strategy to make Estonia ‘a country larger than its borders.’ For Kallas and many Estonians, the internet is a vital part of the hard-won democracy. ‘People are living their lives online,’ says Kallas, and ‘the state should be where the people are.’

But with e-residency, who are ‘the people’ and where are they? Kotka and his colleagues thought their idea had ‘potentially profound implications for social theories of the state and citizen networks in the modern era’. What is the social contract in a country larger than its borders? What if Estonia really did have 10 million e-residents, or even just a million? Would they deserve (or demand) representation, for example?

The expansion in remote working since the COVID-19 pandemic has accelerated the number of workers and businesses who are already detached from location. In 2020 Estonia became the first country to create a Digital Nomad visa. At Tallinn’s flagship startup conference, Latitude59, Norwegian entrepreneur Sarah Sandnes pitched SafetyWing, which offers health and unemployment insurance to digital nomads via membership: you effectively buy into the social security system of a borderless state that doesn’t physically exist (let’s call it Nomadia).

But for billions, borders remain painfully real. The citizens of Nomadia live in stark contrast to refugees and migrants trying to flee war and poverty. Kotka and his team hoped that the diverse community of e-residents would become a symbol of ‘e-cosmopolitanism’, but to those whose work and community still roots them in place, they could also be seen as a footloose and privileged digital elite.

If you’ve ever had to do an ID check online, your data has probably gone through the servers of Estonian verification company Veriff. Its founder and CEO, 27-year old Kaarel Kotkas, also worked on the systems that underpin e-residency and his unnerving goal is to provide ‘a single global identity for everyone on earth’. These secure digital passports could give anyone, no matter their citizenship or status, an e-ID that they could use across the whole internet. ‘It would be easier if we were a country,’ jokes Kotkas (let’s call it Veriffia).

Veriffia and Nomadia are very different ideas to Estonia – a democratic, territorial nation state – but our political conceptions and legal frameworks are scrambling to catch up with the reality of a globalised digital world. On nomad visas and e-residency, many countries are already following Estonia’s lead, while the EU is working on a pan-­European digital wallet that would create new forms of digital residency and digital free movement that most of us have yet to even consider.

So who are you, and where do you live?